The Indian government is delaying WhatsApp’s plan to launch its digital payment service owing to concerns over how the Facebook owned company will store user data and ‘other issues’, Bloomberg reports. According to Bloomberg, the Ministry of Electronics and Information Technology (MEITY) has asked WhatsApp and its partner banks to provide more details about the payments system, said officials in the ministry who wished to remain anonymous. Furthermore, the ministry also asked the National Payments Corporation of India (NPCI) to check whether WhatsApp is fully compliant with its requirements, the report said.

RBI directive delays plans

The service, which was said to be in a pilot phase since February, was originally scheduled to launch in the country in March. According to the Bloomberg report, nearly a million people participated in WhatsApp’s payment service beta phase in the country. However, privacy concerns about parent company, Facebook, following the Cambridge Analytica episode, and the Reserve Bank of India’s directive on data storage, caused major setbacks to the company’s plans.

However, last month, WhatsApp announced that although its payments feature is built on Facebook’s payments infrastructure, the parent company will not store any data pertaining to payments. There was another good news for the world’s second largest messaging service, as reports indicated that India’s finance ministry had proposed to ease RBI’s guidelines on storage of payment system data.

WhatsApp and fake news in India

Nevertheless, WhatsApp was once again the center of another major controversy in the country, as circulation of fake news on its app led to a number of mob lynchings in the past few weeks. This led to the company receiving a warning from MEITY to either act on fake news circulation or face legal action. WhatsApp, apart from issuing a statement, saying that it was working with civil society to fact-check news and raise awareness on spreading rumors, also came up with advertisements on newspapers. Further, the company also rolled out features to curb the circulation of fake messages.
It remains unclear if the fake news/ mob lynching episode has had any role in the company’s bid to begin the payment services, the report added.

According to most experts, with no indications of when the service might actually commence, WhatsApp is likely to lose more ground to the already established competition. However, WhatsApp’s might have a secret trick up its sleeve that could disrupt the payments industry, given the fact that it already has an user base of around 230 million people in the country. The financial might and backing of Facebook should also not be overlooked.